Blogging on liberty, capitalism, reason, international affairs and foreign policy, from a distinctly libertarian and objectivist perspective

Saturday, October 03, 2009

Just sell them

Labour is moaning about big dividends from electricity SOEs. Labour of course took big dividends when it was in power. However, the idea of cutting dividends and having this flow on to power prices is completely absurd. It would be unfair, because private power companies have less capacity to refuse dividends, and it would mean the taxpayer getting ripped off by the capital investment in the SOEs being undervalued. Of course, non-customers of the SOEs would get nothing, and given around 30% of the market isn't with the state, that's quite a bit.

So the best solution is simple: Privatise.

Partly by sale, when market conditions improve. Partly by giving away shares to taxpayers. Then the dividends wont just be money for the state to spend, but for people to choose how they wish to spend it.

That's true public ownership. However, those on the left don't like it, because they think they know better. You see you might spend a dividend on food, clothes, a holiday or your mortgage repayments, they'd spend it on state health, education and picking winners (or losers) in business or the voluntary sector.

However, you know the state will hold onto these for now, because the National Party thinks that the majority of you lot think privatisation is a dirty word.

2 comments:

Anonymous
said...

Actually we (the public) don't give a damn about the capital investment being undervalued or most of that other stuff you seem so angsty about. All we want is not to be ripped off. Americans were ripped off by Enron and others (actually what about a post or two about them or Bluechip or whatever?). Yes, by and large the public is not too stupid. They do view right wing politics and economics with a healthy dose of scepticism and long may that continue.

Change supplier if you feel ripped off. The government has three SOEs in retail, and there are privately owned competitors. There is nothing stopping anyone swapping suppliers. Of course you could adopt the South African and Indian models of cheap electricity and find blackouts and underinvestment on a grand scale. The idea of a "rip off" is that people don't like paying a supplier producing something they want at a profit, which is absurd and hypocritical.

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About Me

Life, liberty and the pursuit of happiness. Politics, philosophy and economics from a pro-capitalist, libertarian, objectivist perspective. Born in New Zealand, live in the UK, career has been in transport, telecommunications and infrastructure policy.